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Orthogonality and Dimensionality in Airline Cluster Analysis using PCA and Kernel PCA

2026-06-06 · Andreas Schlapbach arxiv

This methodological study analyzes the effects of collinearity, effective dimensionality, and cluster stability in a 2023 study of US airline profit cycles from 1995 to 2020 by Renold et al., which uses k-means clustering, principal component analysis, and system dynamic modelling.We replicate their clustering experiment in three spaces -- the original 7-dim. raw-variable space, a 3-dim. PC score space, and a 4-dim. PC score space using their dataset. We show that the six-cluster taxonomy is geometrically robust: k-means in 3-PC space produces bit-for-bit identical cluster assignments relative to 7D raw space. As a nonlinearity check we apply kernel PCA under six kernels spanning three families plus a linear baseline. The kernels confirm an intrinsically linear manifold with no detectable curvature. The silhouette criterion reveals that the dataset structurally supports only three clusters, not six. Collinearity in the raw 7D space suppresses the silhouette signal. A kernel ridge regression check confirms no nonlinear accuracy gain over linear ridge once the COVID19 year is excluded. Together, these results argue for clustering on PC scores rather than raw variables in collinearity-prone panel data.

📄 PDF Abstract BibTeX arXiv:2606.08322

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